Newfoundland’s new Liberal government is facing a Greece-like mountain of red ink—and has no clear path to tackle it
There was a fierce debate during the 2015 federal election campaign over whether Prime Minister Stephen Harper had actually delivered a “surprise” $1.9-billion surplus last year, or had in fact rang up a similar-sized deficit. But, as is so often the case, it was all smoke, no fire. Wrapping up the fiscal year a few billion on either side of the ledger is a rounding error in a $2-trillion economy.
By contrast, Newfoundland and Labrador is suffering from the opposite problem. The province’s finances are in shambles—the deficit has ballooned to $1.96 billion thanks to plunging oil and gas revenues, according to a recent fiscal update—and yet politicians managed to stump their way through a provincial election in November without addressing the issue head-on. And make no mistake: at seven per cent of GDP, the province’s red ink isn’t something that can be fudged away. It’s on par with Greece’s average deficit-to-GDP ratio over the past two decades. And, as some have joked on Twitter, we all know how that turned out.
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The Rock's in a hard place: Why things look bleak for Newfoundland - Macleans.ca
There was a fierce debate during the 2015 federal election campaign over whether Prime Minister Stephen Harper had actually delivered a “surprise” $1.9-billion surplus last year, or had in fact rang up a similar-sized deficit. But, as is so often the case, it was all smoke, no fire. Wrapping up the fiscal year a few billion on either side of the ledger is a rounding error in a $2-trillion economy.
By contrast, Newfoundland and Labrador is suffering from the opposite problem. The province’s finances are in shambles—the deficit has ballooned to $1.96 billion thanks to plunging oil and gas revenues, according to a recent fiscal update—and yet politicians managed to stump their way through a provincial election in November without addressing the issue head-on. And make no mistake: at seven per cent of GDP, the province’s red ink isn’t something that can be fudged away. It’s on par with Greece’s average deficit-to-GDP ratio over the past two decades. And, as some have joked on Twitter, we all know how that turned out.
more
The Rock's in a hard place: Why things look bleak for Newfoundland - Macleans.ca
